Car rental start-up Zoomcar has raised USD 24 million (approximately INR 161 crores) in a Series B funding round led by Ford Smart Mobility LLC, a subsidiary of Ford Motor Company, alongside existing investors Sequoia Capital, Nokia Growth Partners and Empire Angels.
Last year in July, Zoomcar had raised USD 11 million from Sequioa Capital, NGP and Empire Angels. In October 2014, the venture had raised USD 8 million from Sequoia with participation from T.V. Mohandas Pai, chairman of Manipal Global Education and Abhay Jain, Head of Corporate Affairs at Manipal Group, among others. This new round takes its war chest to USD 46 million to date.
Zoomcar, based on successful Western models like Zipcar, which is currently operational in seven Indian cities with nearly 2,000 cars, allows its users to book a car, make the payment, locate the vehicle and unlock it using just its smartphone app. Ford was Zoomcar’s first OEM partner, and the startup said Ford provides “most” of the vehicles on its platform.
“As Ford expands its business to be both an auto and mobility company, we are pursuing a long-term vision to develop services and solutions that make it easier for consumers to move through cities using multiple modes of transportation,” says John Larsen, mobility director, Ford Asia Pacific.
Speaking of why the team chose Ford, Greg Moran, Co-founder and CEO, Zoomcar, said with this capital we plan on expanding our Zoomcar Associate Program (ZAP) which allows users to buy cars registered in the name of Zoomcar.
“The ZoomCar Associate Program (launched in April) is a financing lease model which allows you to fractionally share your car,” he adds, “So you can rent it out when you’re not using it.” The idea of moving away from car ownership to this kind of partial ownership model is something that a lot of leaders in the tech industry have been giving voice lately.
The company has been flooded with applications, Moran claims, and says that he believes it will account for 75 percent of the total cars in company’s fleet by early 2017. “It could even let people get a nicer car than they initially planned,” he adds.
During the announcement on Wednesday, Moran enlightened on the fact that Ford and his company shares a three year old bond based on the vision and values they share related to urban mobility. Customer experience will remain our highest priority as we scale Zoomcar Associate Program across India in the months ahead, he added.
Four year old start-up operates in Bengaluru, Mumbai, Delhi, Pune, Chennai, Hyderabad and Chandigarh. It aims to increase its fleet to more than 25,000 vehicles across 25 cities by 2018.